Many beginners wonder how much they can make in the forex market. The answer depends on several factors. It is generally a percentage, not a specific dollar amount. Likewise, different categories of traders have varying subjective indicators to assess their success in the market. For example, novices consider a daily profit of 1% as a modest amount, while top traders at the world’s leading banks regard the same profit as enormous.
It is important to remember that the best-case scenario for Forex trading involves a small amount of capital, a leverage of 1:100, and a strong strategy. These ideal conditions rarely occur in the real world. As a result, these figures should be treated as theoretical guides only. You’ll never make more money trading than you initially deposit, but the more you deposit, the more profits you’ll likely see.
The success of any trading endeavor depends on many factors. Forex trading strategies depend on risk-reward ratios, which can vary significantly from one currency pair to another. It is also important to understand how leverage works so that you can control a larger position with smaller capital. This, however, makes the margin of capital more vulnerable to market fluctuations. To make a profit, you must know the basics of currency trading and keep a track-record.
The average income of a trader is based on conservative strategies and diversification of risks. A trader might earn up to 2% of his initial deposit per day, which would amount to about 4,000 USD per month. A trader who uses a leverage of 2% would typically risk 40 USD per trade. Obviously, the risk per trade would depend on other factors like the spread, swaps, and previous losses, as well as the withdrawal fees. Using leverage without risk management can lead to stop-outs and a lowered income.